ITC surged 3.87% to Rs 249.65 at 15:18 IST on BSE as fears of Goods and Services Tax overhang has subsided after the GST council finalised four-tier tax structure.
Meanwhile, the S&P BSE Sensex was down 148.73 points or 0.54% at 27,281.55.
The stock jumped on heavy volumes. On BSE, so far 65.50 lakh shares were traded in the counter as against average daily volume of 10.52 lakh shares in the past one quarter. The stock was volatile. The stock surged as much as 6.51% at the day's high of Rs 256 so far during the day. The stock rose 3.2% at the day's low of Rs 248.05 so far during the day. The stock had hit a 52-week high of Rs 266 on 8 September 2016. The stock had hit a 52-week low of Rs 178.67 on 29 February 2016. The stock had outperformed the market over the past one month till 3 November 2016, sliding 0.72% compared with 2.88% fall in the Sensex. The scrip had, however, underperformed the market in past one quarter, declining 4.91% as against Sensex's 0.96% fall.
The large-cap company has equity capital of Rs 1211.51 crore. Face value per share is Rs 1.
The GST council approved four main tax slabs 5%, 12%, 18% and 28% under the proposed Goods and Services Tax (GST). The sin or demerits products (tobacco, aerated drinks, pan masala and luxury cars) will be taxed at 28% with additional cess, quantum of which has not been stated/finalised. However, the government has indicated that overall tax incidence on these categories will remain broadly unchanged, reports suggested.
Further, media reports suggested that most analysts are positive on ITC given its sharp underperformance in past months on GST concerns. A foreign brokerage is reportedly overweight on ITC stock stating that some uncertainty will remain on the final taxation change for ITC. It added that the earnings impact on ITC could be gauged only as clarity emerges on quantum and nature of cess on sin products. Another foreign brokerage reportedly increased target price on ITC as it sees 25% upside. ITC is at a big discount to other FMCG stocks due to the overhang of GST, the brokerage reportedly added. As this overhang is lifted, the brokerage expects sharp re-rating for ITC.
ITC's net profit rose 10.5% to Rs 2500.03 crore on 9.6% growth in net sales to Rs 9535.47 crore in Q2 September 2016 over Q2 September 2015.
ITC is a diversified company, with presence in cigarettes, hotels, paperboards & specialty papers, packaging, agri-business, packaged foods & confectionery, information technology, branded apparel, personal care, stationery and other FMCG products. ITC is a market leader in cigarettes.
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